DTN Midday Livestock Comments 10/17 12:01

DTN Midday Livestock Comments 10/17 12:01 Cattle Futures Continue Higher Monday Strong gains quickly develop in cattle futures as live cattle futures swiftly move to a $1.50 per cwt market rally midday Monday. The ability to hold the support through early week may spark widespread interest through the last half of October. By Rick Kment DTN Analyst GENERAL COMMENTS: Cattle futures have posted strong gains Monday morning with the focus on follow-through buyer support redeveloping as traders are pushing contracts off of contract lows set through the middle of last week. The expectation that additional commercial support may develop is sparking firm interest in all contract months. Lean hog futures remain weak as concerns are redeveloping surrounding December contracts nearing contract lows once again taking the role as spot month contracts once again. Corn prices are mixed in light trade. December corn futures are 1/2 cent lower per bushel. Stock markets are lower in light trade. The Dow Jones is 38 points lower while Nasdaq is down 5 points. LIVE CATTLE: Active buying has quickly redeveloped early in the week as commercial support stepped into the market. Nearby live cattle futures have held triple-digit gains through most of the morning with the support sparking follow-through interest and helping to pull prices well off of contract lows set last week. The ability to build on this market momentum through the next week will help to sustain additional interest in the market, although there still remains a lot of uncertainty surrounding long term support in the cattle complex as prices under $100 per do not bring about a lot of market confidence. Cash cattle activity remains light with show remaining mixed. Smaller offerings at this time are seen in all areas except Nebraska. Inventory taking continues to be done by packers assessing the overall movement of cattle through last week and demand expected over the rest of October. Even though bids may start to develop midweek or earlier, active trade may be reserved for the end of the week. Beef cut-outs at midday are lower $0.16 lower (select) and down $0.17 per cwt (choice) with light movement of 51 total loads reported (22 loads of choice cuts, 13 loads of select cuts, no loads of trimmings, 16 loads of ground beef). FEEDER CATTLE: Strong triple-digit gains are seen Monday morning across feeder cattle futures with traders looking for follow through support as firmness in live cattle futures continues to build on support seen Friday. Even though contracts remain near the bottom of the trading range, the ability to quickly push off of contract lows over the past two trading sessions have sparked widespread interest not only in nearby contract months, but through the entire complex. This may draw additional investment interest back into the market as traders try to take advantage of a potential market rally through the next several weeks. LEAN HOGS: Moderate pressure developed in lean hog futures early Monday morning as follow through pressure sparked by Friday's losses created additional pressure in all contracts. December contracts are now taking over the position as spot month contracts with prices at $41.70 per cwt. Even though current levels remain slightly above contract lows, the potential to retest these contract lows and push prices even lower through the second half of October is causing some additional uncertainty in the hog market following what started as a supportive week in the lean hog complex last week. Cash prices are lower on the National Direct morning cash hog report. The weighted average price fell $1.06 per cwt to $44.81 per cwt with the range from $43.00 to $47.00 on 2,876 head reported sold. Cash prices are unreported due to confidentiality on the Iowa Minnesota Direct morning cash hog report. The National Pork Plant Report reported 132 loads selling with prices adding $0.69 per cwt. Lean hog index for 10/12 is at $52.76 down 0.03 with a projected two-day index of $52.54 down 0.22. Rick Kment can be reached at rick.kment@dtn.com (ES) Copyright 2016 DTN/The Progressive Farmer. All rights reserved.